ABB expresses relief over decision on Islami Bank and concern over 'mob' in banking

The Association of Bankers, Bangladesh (ABB) has welcomed the decision of the governor of Bangladesh Bank to dissolve the existing Board of Directors of Islami Bank including its chairman, and facilitate a fresh start for the institution.

In a statement issued today (15 June), from the office of ABB Chairman and Managing Director of City Bank, Mashrur Arefin, the association described the decision as timely and prudent for the banking sector.

"As the Islami Bank issue had acquired political overtones and given the bank's systemic importance, ABB had expressed its deep concern to the governor on 10 June. We conveyed that an early resolution would be beneficial for the industry, as the situation at Islami Bank was no longer an issue concerning a single institution; its impact was being felt across the banking sector. And as the issue had assumed a political dimension, we also advised that efforts be made to resolve it through dialogue and consensus among the relevant stakeholders," reads the statement. 

"In this context, we believe the decision taken yesterday by the central bank is commendable. We hope it will restore stability at Islami Bank and rebuild the confidence of its depositors, investors and stakeholders."

The statement further adds, "With nearly 30 million customers, a vast deposit and investment base, the country's largest remittance network and a major role in international trade finance, the stability of Islami Bank is not merely its own concern; it is directly linked to the stability of our overall economy. The recent mob-driven protests had created deep concerns among bankers regarding the bank's governance, liquidity and the confidence of depositors and foreign investors. We believe the central bank's decision will help allay these concerns." 

The association said that in the interest of the banking sector, it expects substantial progress in Islami Bank in terms of good governance, accountability, a banking environment free from political influence, and the recovery of its non-performing loans. 

"We also hope that all conscientious citizens will appreciate that mob influence in the banking sector is an ominous signal for this industry. We urge the higher authorities of the government to treat this matter with utmost seriousness," it said.